Better Capitalism

From two of the nation's leading economic thinkers, a concrete action plan to reignite the power of the U.S. economic system In the wake of the Great Recession and America's listless recovery from it, economists, policymakers, and media pundits have argued at length about what has gone wrong with the American capitalist system. Even so, few constructive remedies have emerged. This welcome book cuts through the chatter and offers a detailed, nonideological, and practical blueprint to restore the vigor of the American economy.Better Capitalism extends and significantly expands on the insights of the authors' widely praised previous book, Good Capitalism, Bad Capitalism, co-written with William Baumol. In Better Capitalism, Robert E. Litan and Carl J. Schramm focus on the huge—but often unrecognized—importance of entrepreneurship to overall economic growth. They explain how changes in seemingly unrelated policy arenas—immigration, education, finance, and federal support of university research—can accelerate America's recovery from recession and spur the nation's rate of growth in output while raising living standards. The authors also outline an innovative energy strategy and discuss the potential benefits of government belt-tightening steps. Sounding an optimistic note when gloomy predictions are the norm, Litan and Schramm show that, with wise and informed policymaking, the American entrepreneurial engine can rally and the true potential of the U.S. economy can be unlocked.

“Entrepreneurship is a key virtue of the U.S. economy, which has the potential to lift us out of our current economic malaise. This book provides a thoughtful recipe for encouraging this critical activity.”—Josh Lerner, Harvard Business School and author of Boulevard of Broken Dreams, “To get out of its economic quagmire, America must end the debate over stimulants. It needs to renovate the economic system. In this book, Robert Litan and Carl Schramm make the case that the best way forward is to pave the way to faster formation and greater support of early-stage high-growth companies.”—Edmund S. Phelps, Director, Center on Capitalism and Society, Columbia University and the Winner of the 2006 Nobel Prize in Economics, “Enabling entrepreneurs to flourish can both grow the economy and make the world a better place. I hope Better Capitalism inspires a new generation to stretch the reach of market forces and create new businesses that drive economic growth while also helping solve the problems of the world’s poorest.”—Bill Gates

Robert E. Litan is vice president for research and policy, Ewing Marion Kauffman Foundation, and a senior fellow in economic studies at the Brookings Institution. He lives in Fairway, KS. Carl J. Schramm is a visiting scientist at MIT. He lives in Baltimore, MD. For ten years he was president of the Kauffman Foundation. Both authors are also fellows of the Bush Institute.